Annual Financial Statements Sasfin Holdings Limited Sasfin Holdings for the year ended 30 June 2019 Annual Financial Statements 201 Statements Financial Annual At Sasfin, we contribute to society by going beyond a bank to enable the growth in the business and global wealth of our clients. 9 Sasfin Holdings Limited Annual Financial Statements 2019 |Page C Table of contents Annual Financial Statements Indicates additional information available online or from the Company Secretary. 1 Directors’ responsibility statement 1 Company Secretary’s certification OUR REPORTS 2 Group Audit and Compliance Committee report Annual Financial Statements 2019 This report is Sasfin’s Annual Financial 5 Directors’ report Statements and includes risk and capital management disclosures. 7 Independent auditors’ report 16 Consolidated statement of financial position Integrated Report 2019 17 Consolidated statement of This is Sasfin’s primary report which presents comprehensive income our strategy, performance and plans. 18 Consolidated statement of changes in equity 19 Consolidated statement of cash flows Legal entity terminology used in this report 20 Notes to the consolidated financial statements Group/Sasfin: Sasfin Holdings Limited and its subsidiaries 103 Separate financial statements Banking Group: Sasfin Bank Limited and its subsidiaries 115 Glossary of terms Bank: Sasfin Bank Limited Wealth Group: Sasfin Wealth (Pty) Ltd and its subsidiaries IBC Corporate details Capital: Sasfin Capital (Pty) Limited Company: Sasfin Holdings Limited Statement of preparation In terms of section 29(1)(e)(ii) of the Companies Act 71 of 2008 as amended, we confirm that these Annual Financial Statements were prepared under the supervision of Angela Pillay CA(SA), Group Financial Director and have been audited in compliance with the requirements of sections 29(1)(e)(i) and 30(2)(a) of the Companies Act 71 of 2008 as amended. DISCLAIMER The Group has, in good faith, made a reasonable effort to ensure the fair presentation, accuracy and completeness of the information contained in this document, including all information that may be regarded as “forward-looking statements”. Forward-looking statements may be identified by words such as “believe”, “anticipate”, “expect”, “plan”, “estimate”, “intend”, “project”, and “target”. Forward-looking statements are not statements of fact, but statements by the Board based on its current estimates, projections, expectations, beliefs and assumptions regarding the Group’s future performance, and no assurance can be given to this effect. The risks and uncertainties inherent in the forward-looking statements contained in this document include, but are not limited to, changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; domestic and international business and market conditions such as exchange rate and interest rate movements; changes in the domestic and international regulatory and legislative environments; changes to domestic and international operational, social, economic and political risks; and the effects of both current and future litigation. The Group does not undertake to update any forward-looking statements contained in this document, and does not assume responsibility for any loss or damage, however arising, as a result of the reliance by any party thereon, including, but not limited to, loss of earnings, profits or consequential loss or damage. Page D | Sasfin Holdings Limited Annual Financial Statements 2019 Directors’ responsibility statement The Board of Directors (the Board) of Sasfin Holdings Limited (the Company or the Group) is responsible for the preparation and fair presentation of the Directors’ Report and the Consolidated and Separate Annual Financial Statements of the Company including significant accounting policies and other explanatory notes. The Consolidated and Separate Annual Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements, and the requirements of the Companies Act, No 71 of 2008, as amended (Companies Act). The Board is also responsible for such internal controls as they deem necessary to enable the preparation of these Consolidated and Separate Annual Financial Statements and for maintaining adequate accounting records and an effective system of risk management. Based on its own monitoring and oversight as well as assurance obtained from management, Group Risk, Compliance and Internal Audit, the Board is of the view that an effective internal financial control environment exists to support the integrity of the Consolidated and Separate Annual Financial Statements. The Board has a reasonable expectation that the Company and the Group will have adequate resources to continue in operational existence and as a going concern in the financial year ahead. It is the responsibility of the independent auditors to report on the fair presentation of the Consolidated and Separate Annual Financial Statements. The Consolidated and Separate Annual Financial Statements for the year ended 30 June 2019 were approved by the Board and are signed on its behalf by: Roy Andersen Michael Sassoon Angela Pillay Chair Chief Executive Officer Group Financial Director 17 September 2019 Company Secretary’s certification I hereby certify, in terms of section 88(2)(e) of the Companies Act, that Sasfin Holdings Limited has filed all returns and notices required by the Companies Act with the Companies and Intellectual Property Commission, for the financial year ended 30 June 2019, and that all such returns and notices as are required of a public company are true, correct and up to date. Howard Brown Company Secretary 17 September 2019 Sasfin Holdings Limited Annual Financial Statements 2019 |Page 1 Group Audit and Compliance Committee report INTRODUCTORY COMMENTS The Group Audit and Compliance Committee (GACC/the Committee) is pleased to present its report in respect of the 2019 Annual Financial Statements of Sasfin Holdings Limited (the Group), in compliance with section 94(7) of the Companies Act. The Committee’s functions are further informed by the Companies Act, Banks Act, the JSE Listings Requirements and King Report on Corporate GovernanceTM for South Africa, 2016 (King IVTM)* and are approved by the Board. COMMITTEE COMPOSITION AND ASSESSMENT OF ITS PERFORMANCE In terms of the Banks Act, which takes precedence over the Companies Act, members of the Committee are appointed by the Board and hence not by the shareholders. Only Independent Non-Executive Directors are eligible to serve on the Committee. The Board performs an annual review of the Committee’s compliance with its responsibilities, performance, governance and best practice, as per its Charter. Members Appointed Resigned Gugu Mtetwa1 Chair 28 August 2017 30 September 2019 Linda de Beer2 1 July 2014 30 September 2019 Grant Dunnington 29 July 2013 Richard Buchholz 7 March 2018 Mark Thompson 21 June 2019 1 Appointed as Chair on 19 November 2018. 2 Resigned as Chair on 18 November 2018. The Committee holds private meetings with External Audit, the Chief Audit Executive, the Group Chief Risk Officer, and the Head: Group Compliance. The Chair of the Board, Executive Directors comprising the Chief Executive Officer, Group Financial Director, and executive management are invitees to meetings of the Committee but are excluded from the private meetings of the Committee. FUNCTIONS OF THE COMMITTEE The role of the Committee is to assist the Board to fulfil its oversight responsibilities in areas such as financial reporting, internal control practices, risk management processes and the Internal and External Audit functions. The functions of the Committee are outlined in its Charter, which was reviewed and updated during the year and is available on the Sasfin website. ANNUAL CONFIRMATIONS OF KEY FUNCTIONS FOR THE YEAR During the year under review the Committee, among other matters, considered the following: Financial control, financial reporting and the Integrated Report • Reviewed the Interim Results, Annual Financial Statements, Integrated Report, dividend declarations and trading updates of the Group, and recommend those to the Board for approval • Confirmed that it has assessed the appropriateness of the going concern basis for the preparation of the Interim Results and Annual Financial Statements and the solvency and liquidity tests in support of financial assistance and distributions • Assessed the accounting policies and key assumptions applied in the preparation of the Annual Financial Statements, as well as dealing with technical reporting matters relating to significant exceptional transactions and accounting judgements • Confirmed compliance of the Interim Results and Annual Financial Statements with IFRS and the JSE Listings Requirements • Consideration was given to the annual JSE Proactive Monitoring report to ensure the integrity of the financial information in the Annual Financial Statements. In this regard, the Committee notes that the JSE had issued the Group with a letter on its review of the 2018 Annual Financial Statements. The issues raised related to matters of clarification as well as disclosure. These